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Private employers added 749,000 jobs; economists surveyed by Refinitiv predicted 650,000
Private employers in the United States hired more workers in September than economists predicted, with the ADP National Employment Report on Sept. 30 showing 749,000 new jobs.
Economists surveyed by Refinitiv anticipated a figure of 650,000, with the better-than-expected jobs number a sign of continuing recovery in the U.S. labor market, which has taken a beating from CCP (Chinese Communist Party) virus lockdowns and associated economic fallout.
A revised estimate of gross domestic product (GDP), released Sept. 30 by the Commerce Department, confirmed that the U.S. economy contracted by an annualized 31.4 percent in the second quarter, when businesses were shuttered across the country amid stay-at-home orders and other virus containment measures.
Besides stepping up hiring above economists’ expectations, companies in September also hired significantly more employees than in August, when private employers added 481,000 jobs, the ADP jobs figures show.
“The labor market continues to recover gradually,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “In September, the majority of sectors and company sizes experienced gains with trade, transportation and utilities; and manufacturing leading the way. However, small businesses continued to demonstrate slower growth.”
Small businesses added 192,000 employees, medium-sized businesses added 259,000, while big firms led the way by creating 297,000 jobs.
While the ADP numbers are cause for optimism, diminishing fiscal measures and a surge of CCP virus cases in parts of the country cloud over the economic outlook going forward. Economists have cut their growth forecasts for the fourth quarter, with Goldman Sachs analysts in a recent research note cited by Business Insider, predicting GDP would grow by 3 percent on a quarter-by-quarter basis in the period, down from their previous prediction of 6 percent.
“With economic momentum cooling, fiscal stimulus expiring, flu season approaching, and election uncertainty rising, the main question is how strong the labor market will be going into the fourth quarter,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.
New weekly applications for jobless aid have stalled at higher levels after dropping below 1 million in August. While claims have dropped substantially since hitting a record peak of 6.867 million at the end of March, they remain above their Great Recession peak of 665,000 weekly filings.
New daily cases of the CCP virus also started spiking last week for the first time in eight weeks. Health experts have warned infections will likely rise in the fall as activities move indoors with the onset of colder weather, which economists fear may lead to some restrictions being imposed on businesses in the services sector.
Reuters contributed to this report.
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